Unrest at smartphone manufacturing unit in Noida points to deeper problems

The workers were protesting the sacking of 200 employees

At the Noida manufacturing of Hipad Technology, where workers went on a rampage on Thursday, unrest is not new.

In April, too, workers and locals had ransacked the unit, smashing glass windows and destroying CCTV cameras. Then, they had been demanding higher wages and better working hours, but their demands were not been met.

This time, they were protesting the sacking of 200 employees. Sources said the management decided to discontinue with the services of the workers as demand for mobile phone fell after Diwali.

The facility manufactures handsets for smartphone brand Oppo and power banks for market leader Xiaomi. According to industry sources, Oppo has taken a significant part of its 3 million unit sales from the factory in the July-September period. Realme, Oppo’s new brand launched on May 1, has sold a million handsets till September.

Some employees who faced the axe included trainees. An industry source said this hiring strategy was used by many handset manufacturers in Noida.

“Many handset makers have scaled up operations quickly. They often hire trainees not protected by strict labour laws, as they can be sacked easily,” said a source.

Oppo Mobile India has said it was aware of the incident and workers’ unrest and would try to make decisions in the best interest of its employees. Xiaomi Technology India declined to comment.

Problems galore

Incidents such as the one on Thursday have grown more common in recent times.

In July last year, protests turned violent at a plant operated by smartphone maker Vivo India. It was prompted by the abrupt service discontinuation of 50 workers. Vivo had claimed that the step was taken to improve productivity.

Before that, in March, the Noida unit of mobile phone maker Oppo was besieged by workers after reports of a Chinese executive of the company tearing the Indian national flag. The police had to take charge of the situation.

In July 2016, a protest broke out in the manufacturing unit of durables major LG India in Greater Noida. The protests, demanding better working hours and lower wages, went on for months.

A number of factors are responsible for this, said industry sources.

“Employing skilled labour and running a sustainable model for long requires large investments, forward planning, and strong human resource policies. Relatively new setups fail to meet these basic requirements,” said a senior executive.

The Noida conundrum

Noida is an important region in the map of handset manufacturing in the country. The largest hub of mobile manufacturing, it has 35 production units with a capacity of 200 million handsets a year.

The annual demand for handsets in the country is 450 million units.

Regular disruption, however, has the potential to impact supply.

Faisal Kawoosa, the founder of analyst firm TechArc, said halting production for a day or two might not impact supply, as companies can ramp up production. “But, if it extends beyond a week, then that might be a problem for the brand,” he added